Social Security—2008 Factors On Oct. 17, the Social Security Administration announced updated factors for 2008. Wage Base The maximum amount of earnings taxable in 2008 is $102,000 for Social Security purposes. COLA The cost-of-living increase in benefits is 2.3 percent, first applicable to December 2007 benefits, payable in January 2008.
Wage Index The average annual wage figure of $38,651.41 will be used in computing benefits for workers who become eligible in 2008. This figure is based on data for the last complete year (2006) and was used to determine other wageindexed numbers given in the table below.
FACTOR
2008
Wage base:
2007
$ 102,000 No Limit $ 75,900
$ 97,500 No Limit $ 72,600
Cost-of-living increase (applies to December benefits, payable in January) Average annual wage (based on data two years earlier)
2.3% $38,651.41
3.3% $36,952.94
PIA formula, 1st bend point PIA formula, 2nd bend point Maximum family benefit, 1st bend point Maximum family benefit, 2nd bend point Maximum family benefit, 3rd bend point
$ 711 $ 4,288 $ 909 $ 1,312 $ 1,711
$ 680 $ 4,100 $ 869 $ 1,255 $ 1,636
Retirement test exempt amount (annual) below SSNRA
$ 13,560
$ 12,960
$ 36,120
$ 34,440
$ 1,050
$ 1,000
6.20% 1.45% 7.65%
6.20% 1.45% 7.65%
15.30%
15.30%
for Social Security for Medicare old-law wage base, for indexing PBGC maximum, etc.
year of SSNRA Wages needed for one quarter of coverage FICA (employee) tax rate: Social Security (OASDI) Medicare (HI) Total SECA (self-employed) tax rate, total
IRS Pension Limits for 2008 Principal Limits IRC
Limit
415(b)(1)
Defined benefit plan limit
415(c)(1)
Defined contribution plan limit
401(a)(17)
Limit on includible compensation *
402(g)(1)
Limit on 401(k)/403(b) elective deferrals
414(q)
HCE definition
414(v)(2)
401(k)/403(b)/457(b) Catch-up deferral limit
2008 2007 2008 Next % Increase Rounded Rounded Unrounded Increment Needed $185,000
$180,000
$187,424
$190,000
1.4%
46,000
45,000
46,856
47,000
0.3%
230,000
225,000
234,280
235,000
0.3%
15,500
15,500
15,866
16,000
0.8%
105,000
100,000
105,856
110,000
3.9%
5,000
5,000
5,289
5,500
4.0%
Other Limits IRC
Limit
2008 2007 2008 Next % Increase Rounded Rounded Unrounded Increment Needed
457(b)
Limit on nonqualified deferrals
$15,500
$15,500
$15,866
$16,000
0.8%
416(i)
Top-heavy key employee definition
150,000
145,000
152,282
155,000
1.8%
409(o)(1)(C)
ESOP payouts, five-year limit
935,000
915,000
937,120
940,000
0.3%
409(o)(1)(C)
ESPO payouts, additional one-year limit
185,000
180,000
187,424
190,000
1.4%
408(k)(2)(C)
SEP pay threshold
500
500
527
550
4.4%
* Governmental plans have special rules for eligible participants as defined in OBRA ’93.
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